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Evening markets: Real helps sugar. Ordeal props up Paris wheat

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Sure, US markets were closed on Thursday for the Thanksgiving holiday.

 

But they were not completely without guidance for investors elsewhere.

 

Overnight, the exchanges released data on deliveries against December contracts, which on Friday hit first notice day, and the beginning of the expiry process.

 

And the deliveries were not exactly huge, which could be viewed as a positive factor, in that large figures are often taken as a sign that futures markets are attractive places for sellers of physical crop.

 

‘On the lighter side’

Sure, against Minneapolis spring wheat, deliveries were a relatively large 343 contracts, although arguably less hefty than it might have been had not the December lot vastly underperformed this week.

 

Its discount to the March 2020 contract soared from $0.14 a bushel to $0.20 a bushel over the previous sessions, offering greater incentive for sellers to hold off for now.

 

But deliveries of Kansas City hard red winter wheat were a thin 11 lots. And none were offered against the December Chicago soft red winter wheat contract.

 

Nor were there any against corn or oats, although soyoil attracted 226 contracts, and soymeal 319.

 

“First notice day deliveries were on the lighter side,” said Terry Reilly at Futures International.

 

‘Slow farmer selling’

If that was one sign of cautious support for grain bulls, another was the return of rain to some parts of France and the UK.

 

As Agritel reminded, “winter wheat sowings are not finished yet which is suggesting the possible decrease of area”.

 

Paris soft milling wheat for March closed up 0.4% at 183.75 a tonne, with CRM AgriCommodities saying the contract was “underpinned by robust exports and slow farmer selling due to French planting delays for the 2020 harvest”.

 

London feed wheat, however, was a little less buoyant, falling by 0.3% to £150.25 a tonne, amid some idea of growers taking advantage of prices above £150, with the forecast for the next week, currently, drier.

 

Coffee cools

Among soft commodities, London robusta futures for March eased by 0.3% to $1,398 a tonne – a small drop, although one which did surrender the psychologically important $1,400-a-tonne mark.

 

Rabobank was little help to bulls in forecasting a bumper 20.5m-bag robusta harvest in Brazil in 2020, up 1.0m bags year on year on its data.

 

Meanwhile, Marex Spectron forecast stronger-than-average coffee exports from Indonesia, mainly a robusta grower, for the rest of the season ending in April 2020, noting a stronger expectation for production.

 

Sugar sweetens

The fall in robusta futures defied strength in the Brazilian real, which rebounded 1.7% against the dollar in late deals after hitting all-time lows earlier in the week.

 

A stronger real boosts values in dollar terms of assets over which Brazil has a big influence - in coffee, sure, more arabica than robusta, but the likes of sugar too.

 

London white sugar for March gained 0.5% to $343.20 a tonne.

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